Seasonal Adjustment of CPI and CPIH

Hux Dixon () and Monica George Michail ()

No 45, National Institute of Economic and Social Research (NIESR) Policy Papers from National Institute of Economic and Social Research

Abstract: It is feasible to produce a seasonally-adjusted series corresponding to Tables 56 (CPIH) and 57 (CPI) on a monthly basis. There are different options about how to do this that all fall within the various guidelines on seasonal adjustment from the United Nations, Eurostat and the ONS. When seasonality is taken into account, although the amplitude of the seasonal pattern has varied over the decades, there are big drops regularly in January and July, with big peaks in December and June. The current month-on-month inflation should be reported in the CPI Bulletin as a main point, as a reference for how the actual figure compares to the "normal" value for that month. This is in line with other National Statistical Institutes (NSIs). We recommend breaking up the CPI/CPIH series and setting the values pre-2015 as given (subject to review) and updating the SA series from 2015 to present. The ONS employs the direct estimation of all SA CPI and CPIH series, except for Division 4 which includes policy-induced variables. If the ONS decides to implement indirect estimation, this should be done in a staged manner after the publication of the direct estimates has been in place for some time. To revise all the SA series each month. If the ONS follows recommendation 2.1 of splitting up the series into three, this would mean updating within the last sub-period (2015 to present). The current estimate of the current monthly SA inflation is reported in the main points of the CPI Bulletin. There is an additional section on the SA data for the past year in comparison to the original series, plus some comments on major revisions (this section can be every month or less frequently). CPI Tables 58 and 59 are updated each month.

Date: 2025-05
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